Global airline profit margins further squeezed in Q3 of 2018: IATA

Source: Xinhua| 2019-01-19 04:10:40|Editor: yan
Video PlayerClose

GENEVA, Jan. 18 (Xinhua) -- Financial results from 2018's third quarter indicated on Friday that a further squeeze on airline profit margins due to higher input costs last year, the International Air Transport Association (IATA) said in its December Airlines Financial Monitor.

Free cash flow generation also declined moderately in the quarter.

Equity markets have been volatile in recent months, said IATA, noting that global airline share prices fell by almost 10 percent in December.

This fall offset the similarly sized increase observed in November as market sentiment on airlines moved with oil prices and recession risk.

The Brent Crude oil price is currently around 60 U.S. dollars, said IATA, 30 percent lower compared to the values seen during the price peak in early October.

Base fare passenger yields have continued to come under downward pressure.

"That said, yields in the less price-sensitive premium cabin have trended upwards recently, helping airlines to recover part of the pick-up in unit costs," said IATA.

Industry-wide revenue passenger kilometers rose by 6.2 percent year-on-year in November, whereas freight volumes stopped growing.

Alongside broader volatility in the global equity market, the world's airline share price index fell by 9.4 percent in December to levels last seen two years ago.

All three regional airline sub-indices declined during the month, led by North America (down 16.5 percent). The Europe indices fell by 5.6 percent and the Asia Pacific by 2.5 percent.

Global airline share prices fell by 20 percent over the course of 2018, compared to an 11.3 percent fall in the worldwide equity market.

"The underperformance of airline shares across much of 2018 mainly reflected investor concerns about the impact of rising costs on airline financial performance," said IATA.

However, the sharp fall in oil prices in late-2018 contributed to airline shares outperforming during Q4.

TOP STORIES
EDITOR’S CHOICE
MOST VIEWED
EXPLORE XINHUANET
010020070750000000000000011105521377558441